Rio Tinto joins Reservoir at Timok complex in Serbia

For any junior to entice a major to earn into an exploration project is impressive. To repeat that success with a different major on a separate set of concessions, and at a dismal time in the markets, is striking. Reservoir Minerals (TSXV: RMC; US-OTC: RVRLF) has done both. 

Since 2010, Freeport-McMoRan (NYSE: FCX) has earned a 55% interest in Reservoir’s high-grade Timok project in eastern Serbia’s Timok copper-gold magmatic complex, and will own 75% once it completes a bankable feasibility study.

The partners discovered the Cukaru Peki deposit, which has returned remarkable drill results, including an intercept in July measuring 84 metres of 10.8% copper and 10.86 grams gold, including 46 metres of 15.9% copper and 16.77 grams gold.

Freeport has committed US$18.7 million to exploration this year at Cukaru Peki, which has high sulphidation copper-gold and porphyry copper-gold mineralization. 

Reservoir has now signed an earn-in and joint-venture agreement with Rio Tinto (NYSE: RIO; LSE: RIO) on four wholly owned exploration permits in the same Timok magmatic complex. The permits covered under the latest JV are Nikolicevo, Kraljevica, Coka Kupjatra and Tilva Njagra. Rio Tinto will have the option to earn up to a 75% interest in stages by funding project expenses of up to US$75 million.

On news of the Rio Tinto deal, one mining analyst at U.K.-based Investec Securities gushed that the area Reservoir is exploring in Serbia “will prove to be one of the greatest mineral provinces globally,” and that “recent drilling has demonstrated some of the [most] impressive grades of copper we have ever seen.”

Raymond Goldie of Salman Partners in Toronto, describe the Rio Tinto JV as “admirable,” noting that not only is it “an attestation of the value of Cukaru Peki itself, and of any satellite deposits that might be discovered in the Timok district, but also of the ability of Reservoir’s management to squeeze money out of Rio Tinto in today’s tough financial environment.”

The four permits cover a combined area of 265.6 sq. km in the Timok magmatic complex, with Nikolicevo and Kraljevica in the east and Coka Kupjatra and Tilva Njagra in the west.

In an exploration update on all its properties across Serbia, Romania and Macedonia, Reservoir described the Nikolicevo and Kraljevica permits as “prospective for both Cukaru Peki and Bor district styles of porphyry and high sulphidation epithermal massive sulphide mineralization.” (The Bor district is home to the world-class Bor-Majdanpek mining and smelting complex.)

Reservoir says the Nikolicevo permit contains “the same late Cretaceous andesite volcanic sequence that hosts the Cukaru Peki copper-gold mineralization,” while in the Kraljevica permit, 2 km south of Nikolicevo, the geology is dominated by “Miocene clastic and recent alluvium sequences overlying late Cretaceous volcanics, and outcrops of basement Jurassic and Cretaceous sedimentary rocks and locally Palaeozoic granitoid rocks in the south of the permit.”

The company says the Coka Kupjatra and Tilva Njagra exploration permits are prospective for epithermal (high- and low-sulphidation) gold, and porphyry and skarn copper-gold mineralization.